Three ways the recent market turmoil will affect you

1 The economy The stock market turmoil was driven by fears that the slowdown in growth in China would affect the world economy and that the recoveries under way in the developed world would not be solid enough to compensate. All the signs are that the Irish economy is growing quickly at the moment – this was confirmed by jobs data published this week.

If the world economy were to slow sharply, it would have implications for growth, jobs and our public finances. Forecasts of growth of about 3 per cent a year in Ireland out to 2020 are based on expectations that the US and UK economies can record growth of 2.5-3 per cent per year and the euro zone can grow at more than 1.5 per cent.

If these numbers went badly off course, our figures would be affected. For the moment, growth and the budget figures are ahead of target, so we have some leeway.

2 Interest rates One of the key factors for many people's pockets – and for our national finances – is the level of interest rates. When you are in debt, low rates are important. The turmoil this week has increased expectations the US will not increase rates as expected next month. The UK had been expected to follow, though any increase in euro zone rates is a long way off.

Now it looks as if international rates may stay lower for longer, particularly if expectations for growth remain mixed.There is a balance here for Ireland: low growth internationally is not good for us, but to the extent it keeps interest rates low, that is a bonus, particularly if our national borrowing rates can remain at current levels. For the moment we have strong growth and low rates, the ideal combination.

3 Your pension fund and investments If you invest in the stock market directly, then you will have needed nerves of steel in recent days. The volatility has been unusual, as shares have fallen and surged. Those who invested in more sophisticated products based on oil or the price of commodities such as gold have seen significant losses, which may or may not be recouped in the months ahead.

For equities, it underlines the old adage about shares being a longer-term investment; after all, the Iseq index of Irish shares has still delivered a return of more than 30 per cent in the past year.

The ultimate long-term investment is, of course, your pension fund. For people in defined contribution schemes, where the investment risk lies with the pension-holder – typically some 40-50 per cent of the fund is invested in equities – their fund value will have swung up and down. Best not to worry about these short-term swings. The only real concern would be if we head in the months ahead into a big market crash or a bear market, fuelled by further uncertainty.

For defined benefit funds, any share fall will do nothing to help the arithmetic of solvency, particularly when rock- bottom bond yields make it expensive to buy annuities for those retiring, thus increasing liabilities. Current market trends, and particularly low interest rates, will just ensure that more and more of these funds continue to close.